Toggle SGML Header (+)


Section 1: 8-K (FORM 8-K)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): January 24, 2017

 

FIRST COMMUNITY BANCSHARES, INC.

 

(Exact name of registrant as specified in its charter)

  

Nevada   000-19297   55-0694814
(State or other jurisdiction   (Commission   (IRS Employer
of incorporation)   File Number)   Identification No.)
         

P.O. Box 989

Bluefield, Virginia

  24605-0989
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (276) 326-9000

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

   

 

 

Item 2.02Results of Operations and Financial Condition.

 

On January 24, 2017, First Community Bancshares, Inc. (the “Company”) announced by press release its earnings for the fourth quarter and full year of 2016. A copy of the press release is attached hereto as Exhibit 99.1.

 

Item 8.01Other Events.

 

On January 24, 2017, the Company announced by press release its quarterly cash dividend to common stockholders of sixteen cents ($0.16) per common share, payable on February 17, 2017, to shareholders of record on February 3, 2017. A copy of the press release is attached hereto as Exhibit 99.1.

 

Item 9.01Financial Statements and Exhibits.

 

(d)The following exhibit is included with this report:

 

Exhibit No.   Exhibit Description
     
99.1   Earnings and dividend press release dated January 24, 2017

 

Forward-Looking Statements

 

This Current Report on Form 8-K contains forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include:  changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Company’s Securities and Exchange Commission reports, including but not limited to the Annual Report on Form 10-K for the most recent year ended. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

 

   

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

      FIRST COMMUNITY BANCSHARES, INC.
         
Date: January 24, 2017   By: /s/ David D. Brown
         
        David D. Brown
        Chief Financial Officer

 

   

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

 

Exhibit 99.1

 

 

NEWS RELEASE

 

FOR IMMEDIATE RELEASE: FOR MORE INFORMATION, CONTACT:
January 24, 2017 David D. Brown
  (276) 326-9000

 

First Community Bancshares, Inc. Announces Fourth Quarter and Full Year 2016 Results

and Quarterly Dividend

 

Bluefield, Virginia – First Community Bancshares, Inc. (NASDAQ: FCBC) (www.fcbinc.com) (the “Company”) today reported its unaudited results of operations and other financial information for the quarter and year ended December 31, 2016. The Company reported net income available to common shareholders of $6.40 million, or $0.38 per diluted common share for the quarter ended December 31, 2016, which represents an 11.76% increase in per share diluted earnings compared to the same quarter of 2015. Net income available to common shareholders was $25.13 million, or $1.45 per diluted common share for the year ended December 31, 2016, which represents a 10.69% increase in per share diluted earnings over 2015.

 

The Company also announced today that the Board of Directors declared a quarterly cash dividend to common shareholders of sixteen cents ($0.16) per common share, which represents an increase of 14.29% over the first quarter of 2016. The quarterly dividend is payable to common shareholders of record on February 3, 2017, and is expected to be paid on or about February 17, 2017. The current year marks the 32nd consecutive year of cash dividends paid to stockholders.

 

On October 1, 2016, the Company sold two North Carolina insurance offices operating under the trade name Greenpoint Insurance Group, Inc. and two Virginia offices operating under the trade name Carr & Hyde Insurance to Ascension Insurance Agency, Inc. The transaction does not impact the Company’s in-branch insurance offices operating as First Community Insurance Services, Inc. in West Virginia and Virginia.

 

On January 9, 2017, the Company redeemed all of its previously issued trust preferred securities totaling $15.46 million. The callable trust preferred securities bore an interest rate of three-month LIBOR plus 2.95% with a maturity date of October 8, 2033.

 

Fourth Quarter 2016 Highlights

 

·Income Statement
oNet income available to common shareholders increased $256 thousand, or 4.16%, to $6.40 million compared to the same quarter of 2015.
oDiluted earnings per share increased $0.04, or 11.76%, to $0.38 compared to the same quarter of 2015.
oCore, non-GAAP diluted earnings per common share increased $0.02, or 5.88%, to $0.36 compared to the same quarter of 2015.
oNet interest margin increased 1 basis point to 3.99%, and normalized net interest margin increased 15 basis points to 3.83% compared to the same quarter of 2015.

 

·Balance Sheet
oThe non-covered loan portfolio increased $172.45 million, or 10.62%, compared to December 31, 2015.
oBook value per common share increased $1.00 to $19.95 compared to December 31, 2015.
oThe Company repurchased 29,518 common shares during the quarter resulting in 1,182,294 shares repurchased during the year. The Company has repurchased 2.55 million shares since January 1, 2014.
oThe Company and its subsidiary bank both significantly exceed regulatory “well capitalized” targets as of December 31, 2016.

 

·Asset Quality
oTotal nonperforming assets decreased $5.51 million compared to December 31, 2015, largely due to a decrease in covered OREO.
oTotal non-covered nonperforming assets decreased $1.72 million compared to December 31, 2015.

oNon-covered delinquent loans, which are comprised of loans 30 days or more past due and nonaccrual loans, as a percentage of total non-covered loans improved 33 basis points to 1.39% as of December 31, 2016, from 1.72% as of December 31, 2015.

 

  1 

 

 

Non-GAAP Financial Measures

 

The Company prepares its financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). This press release also refers to certain non-GAAP financial measures that the Company believes provide investors with important information, when used in conjunction with results presented in accordance with GAAP, regarding its operational performance. The Company’s non-GAAP financial measures presented in this release include core earnings, the efficiency ratio, tangible book value per common share, average tangible common equity, and normalized net interest margin. Management believes that core earnings provide the Company and investors a valuable tool to evaluate the Company’s financial results. Management believes that the efficiency ratio provides important information about the Company’s operating expense control and efficiency of operations. Management also believes this ratio focuses attention on the core operating performance of the Company over time and is highly useful in comparing period-to-period operating performance of core business operations. The efficiency ratio used by the Company may not be comparable to efficiency ratios reported by other financial institutions. The reconciliations of these measures to GAAP measures are provided within this news release.

 

About First Community Bancshares, Inc.

 

First Community Bancshares, Inc., a financial holding company headquartered in Bluefield, Virginia, provides banking products and services through its wholly owned subsidiary First Community Bank. First Community Bank operated 45 branch banking locations in Virginia, West Virginia, North Carolina, and Tennessee as of December 31, 2016. First Community Bank provides insurance services through First Community Insurance Services and offers wealth management and investment advice through its Trust Division and First Community Wealth Management, which collectively managed $846 million in combined assets as of December 31, 2016. The Company’s common stock is listed on the NASDAQ Global Select Market under the trading symbol, “FCBC”. The Company reported consolidated assets of $2.39 billion as of December 31, 2016. Additional investor information is available on the Company’s website at www.fcbinc.com.

 

This news release may include forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include: changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Company’s Securities and Exchange Commission reports including, but not limited to, the Annual Report on Form 10-K for the most recent fiscal year end. Pursuant to the Private Securities Litigation Reform Act of 1995, the Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

 

  2 

 

 

Financial Performance

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

 

   Three Months Ended   Year Ended 
   December 31,   September 30,   June 30,   March 31,   December 31,   December 31, 
(Amounts in thousands, except share and per share data)  2016   2016   2016   2016   2015   2016   2015 
Interest income                                   
Interest and fees on loans  $21,956   $21,952   $22,237   $21,573   $21,633   $87,718   $87,632 
Interest on securities   1,362    1,643    1,891    1,957    2,023    6,853    8,203 
Interest on deposits in banks   98    26    9    20    21    153    267 
Total interest income   23,416    23,621    24,137    23,550    23,677    94,724    96,102 
Interest expense                                   
Interest on deposits   1,145    1,133    1,087    1,114    1,202    4,479    5,878 
Interest on borrowings   1,314    1,367    1,359    1,325    1,300    5,365    5,471 
Total interest expense   2,459    2,500    2,446    2,439    2,502    9,844    11,349 
Net interest income   20,957    21,121    21,691    21,111    21,175    84,880    84,753 
Provision for (recovery of) loan losses   500    (1,154)   722    1,187    434    1,255    2,191 
Net interest income after  provision (recovery)   20,457    22,275    20,969    19,924    20,741    83,625    82,562 
Total noninterest income   6,238    5,895    7,030    7,903    7,483    27,066    29,530 
Total noninterest expense   16,653    18,557    18,722    18,814    19,083    72,746    76,171 
Income before income taxes   10,042    9,613    9,277    9,013    9,141    37,945    35,921 
Income tax expense   3,638    3,230    3,022    2,929    2,993    12,819    11,381 
Net income   6,404    6,383    6,255    6,084    6,148    25,126    24,540 
Dividends on preferred stock   -    -    -    -    -    -    105 
Net income available to common shareholders  $6,404   $6,383   $6,255   $6,084   $6,148   $25,126   $24,435 
                                    
Earnings per common share                                   
Basic  $0.38   $0.37   $0.36   $0.34   $0.34   $1.45   $1.32 
Diluted   0.38    0.37    0.36    0.34    0.34    1.45    1.31 
Cash dividends per common share   0.16    0.16    0.14    0.14    0.14    0.60    0.54 
Weighted average shares outstanding                                   
Basic   16,891,010    17,031,074    17,414,320    17,859,197    18,193,824    17,319,689    18,531,039 
Diluted   17,043,869    17,083,526    17,462,845    17,892,531    18,226,719    17,365,524    18,727,464 
Performance ratios                                   
Return on average assets   1.05%   1.03%   1.02%   0.99%   0.99%   1.02%   0.97%
Return on average common equity   7.49%   7.58%   7.47%   7.15%   7.05%   7.42%   7.08%
Return on average tangible common equity(1)   10.75%   11.07%   10.88%   10.34%   10.17%   10.76%   10.25%

 

 

(1)A non-GAAP financial measure defined as average stockholders’ equity less average goodwill, other intangibles, and preferred stock liquidation preference

 

RECONCILIATION OF GAAP NET INCOME TO CORE EARNINGS (Unaudited)

 

   Three Months Ended   Year Ended 
   December 31,   September 30,   June 30,   March 31,   December 31,   December 31, 
(Amounts in thousands, except per share data)  2016   2016   2016   2016   2015   2016   2015 
Net income, GAAP  $6,404   $6,383   $6,255   $6,084   $6,148   $25,126   $24,540 
Non-GAAP adjustments:                                   
Net gain on divestitures   (619)   (3,065)   -    -    -    (3,684)   - 
Allowance reversal for sold loans   -    (1,354)   -    -    -    (1,354)   - 
Merger, acquisition, and divestiture expense   55    226    410    39    -    730    86 
Net (gain) loss on sale of securities   (388)   (25)   79    (1)   7    (335)   (144)
FHLB debt prepayment fees   -    -    -    -    -    -    1,702 
Net impairment losses   -    4,635    11    -    -    4,646    - 
Other non-core items   (48)   (264)   -    (240)   31    (552)   (1,004)
Total adjustments to core earnings   (1,000)   153    500    (202)   38    (549)   640 
Tax effect   (708)   56    184    (74)   14    (542)   660 
Core earnings, non-GAAP(1)  $6,112   $6,480   $6,571   $5,956   $6,172   $25,119   $24,520 
                                    
Core diluted earnings per common share  $0.36   $0.38   $0.38   $0.33   $0.34   $1.45   $1.31 
Performance ratios                                   
Core return on average assets   1.01%   1.05%   1.07%   0.97%   0.99%   1.02%   0.97%
Core return on average common equity   7.15%   7.70%   7.85%   7.00%   7.08%   7.42%   7.09%
Core return on average tangible common equity(2)   10.26%   11.24%   11.43%   10.12%   10.21%   10.75%   10.25%

 

 

(1)Excludes gains, losses, and impairment losses on securities; goodwill and intangible impairment; taxes; and other non-recurring income and expense items from net income
(2)A non-GAAP financial measure defined as average stockholders’ equity less average goodwill, other intangibles, and preferred stock liquidation preference

 

  3 

 

 

 

Net Interest Income and Margin

 

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)

 

   Three Months Ended December 31, 
   2016   2015 
   Average       Average Yield/   Average       Average Yield/ 
(Amounts in thousands)  Balance   Interest(1)   Rate(1)   Balance   Interest(1)   Rate(1) 
Assets                              
Earning assets                              
Loans(2)  $1,846,848   $22,012    4.74%  $1,694,569   $21,661    5.07%
Securities available for sale   193,342    1,644    3.38%   377,213    2,349    2.47%
Securities held to maturity   67,254    182    1.08%   72,568    194    1.06%
Interest-bearing deposits   35,470    98    1.10%   19,544    21    0.43%
Total earning assets   2,142,914    23,936    4.44%   2,163,894    24,225    4.44%
Other assets   275,022              298,312           
Total assets  $2,417,936             $2,462,206           
                               
Liabilities and stockholders' equity                              
Interest-bearing deposits                              
Demand deposits  $348,869   $73    0.08%  $344,214   $47    0.05%
Savings deposits   522,864    57    0.04%   530,977    78    0.06%
Time deposits   519,521    1,015    0.78%   561,443    1,077    0.76%
Total interest-bearing deposits   1,391,254    1,145    0.33%   1,436,634    1,202    0.33%
Borrowings                              
Federal funds purchased   82    -    0.00%   2,114    2    0.38%
Retail repurchase agreements   66,776    12    0.07%   74,042    14    0.08%
Wholesale repurchase agreements   48,913    464    3.77%   50,000    474    3.76%
FHLB advances and other borrowings   92,175    838    3.62%   83,748    810    3.84%
Total borrowings   207,946    1,314    2.51%   209,904    1,300    2.46%
Total interest-bearing liabilities   1,599,200    2,459    0.61%   1,646,538    2,502    0.60%
Noninterest-bearing demand deposits   454,161              466,623           
Other liabilities   24,410              23,293           
Total liabilities   2,077,771              2,136,454           
Stockholders' equity   340,165              345,752           
Total liabilities and stockholders' equity  $2,417,936             $2,482,206           
Net interest income, FTE       $21,477             $21,723      
Net interest rate spread             3.83%             3.84%
Net interest margin             3.99%             3.98%

 

 

(1)Fully taxable equivalent ("FTE") basis based on the federal statutory rate of 35%
(2)Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.

 

  4 

 

 

AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS (Unaudited)

 

   Year Ended December 31, 
   2016   2015 
   Average       Average Yield/   Average       Average Yield/ 
(Amounts in thousands)  Balance   Interest(1)   Rate(1)   Balance   Interest(1)   Rate(1) 
Assets                              
Earning assets                              
Loans(2)  $1,793,618   $87,848    4.90%  $1,680,021   $87,768    5.22%
Securities available for sale   287,332    8,047    2.80%   363,359    9,575    2.64%
Securities held to maturity   71,069    757    1.07%   70,987    770    1.08%
Interest-bearing deposits   18,864    153    0.81%   98,639    267    0.27%
Total earning assets   2,170,883    96,805    4.46%   2,213,006    98,380    4.44%
Other assets   284,575              307,928           
Total assets  $2,455,458             $2,520,934           
                               
Liabilities and stockholders' equity                              
Interest-bearing deposits                              
Demand deposits  $342,169   $250    0.07%  $343,036   $203    0.06%
Savings deposits   531,050    248    0.05%   532,221    367    0.07%
Time deposits   525,162    3,981    0.76%   631,654    5,308    0.84%
Total interest-bearing deposits   1,398,381    4,479    0.32%   1,506,911    5,878    0.39%
Borrowings                              
Federal funds purchased   4,058    26    0.64%   535    2    0.37%
Retail repurchase agreements   68,701    49    0.07%   71,262    68    0.10%
Wholesale repurchase agreements   49,727    1,874    3.77%   50,000    1,878    3.76%
FHLB advances and other borrowings   116,602    3,416    2.93%   89,400    3,523    3.94%
Total borrowings   239,088    5,365    2.24%   211,197    5,471    2.59%
Total interest-bearing liabilities   1,637,469    9,844    0.60%   1,718,108    11,349    0.66%
Noninterest-bearing demand deposits   456,474              433,936           
Other liabilities   23,040              20,691           
Total liabilities   2,116,983              2,172,735           
Stockholders' equity   338,475              348,199           
Total liabilities and stockholders' equity  $2,455,458             $2,520,934           
Net interest income, FTE       $86,961             $87,031      
Net interest rate spread             3.86%             3.78%
Net interest margin             4.01%             3.93%

 

 

(1)Fully taxable equivalent ("FTE") basis based on the federal statutory rate of 35%
(2)Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.

 

  5 

 

 

 

RECONCILIATION OF GAAP NET INTEREST MARGIN TO NON-GAAP NORMALIZED NET INTEREST MARGIN (Unaudited)

 

   Three Months Ended December 31, 
   2016   2015 
(Amounts in thousands)  Interest(1)   Average Yield/
Rate(1)
   Interest(1)   Average Yield/
Rate(1)
 
Earning assets                    
Loans(2)  $22,012    4.74%  $21,661    5.07%
Accretion income   1,506         2,493      
Less: cash accretion income   633         824      
Non-cash accretion income   873         1,669      
Loans, normalized(3)   21,139    4.55%   19,992    4.68%
Other earning assets   1,924    2.59%   2,564    2.17%
Total earning assets   23,063    4.28%   22,556    4.13%
Total interest-bearing liabilities   2,459    0.61%   2,502    0.60%
Net interest income, FTE(3)  $20,604        $20,054      
Net interest rate spread, normalized(3)        3.67%        3.53%
Net interest margin, normalized(3)        3.83%        3.68%

 

 

(1)FTE basis based on the federal statutory rate of 35%
(2)Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.
(3)Normalized totals are non-GAAP financial measures that exclude non-cash loan interest accretion related to PCI loans.

 

   Year Ended December 31, 
   2016   2015 
(Amounts in thousands)  Interest(1)   Average Yield/
Rate(1)
   Interest(1)   Average Yield/
Rate(1)
 
Earning assets                    
Loans(2)  $87,848    4.90%  $87,768    5.22%
Accretion income   7,690         11,258      
Less: cash accretion income   2,924         4,149      
Non-cash accretion income   4,766         7,109      
Loans, normalized(3)   83,082    4.63%   80,659    4.80%
Other earning assets   8,957    2.37%   10,612    1.99%
Total earning assets   92,039    4.24%   91,271    4.12%
Total interest-bearing liabilities   9,844    0.60%   11,349    0.66%
Net interest income, FTE(3)  $82,195        $79,922      
Net interest rate spread, normalized(3)        3.64%        3.46%
Net interest margin, normalized(3)        3.79%        3.61%

 

 

(1)FTE basis based on the federal statutory rate of 35%
(2)Nonaccrual loans are included in average balances; however, no related interest income is recorded during the period of nonaccrual.
(3)Normalized totals are non-GAAP financial measures that exclude non-cash loan interest accretion related to PCI loans.

 

  6 

 

 

Noninterest Income and Expense

 

CONDENSED QUARTERLY STATEMENTS OF INCOME (Unaudited)

 

   Three Months Ended   Year Ended 
   December 31,   September 30,   June 30,   March 31,   December 31,   December 31, 
(Amounts in thousands)  2016   2016   2016   2016   2015   2016   2015 
Noninterest income                                   
Wealth management  $681   $653   $810   $684   $744   $2,828   $2,975 
Service charges on deposits   3,442    3,494    3,361    3,291    3,563    13,588    13,717 
Other service charges and fees   2,014    2,024    2,054    2,010    2,058    8,102    8,045 
Insurance commissions   59    1,592    1,600    2,191    1,563    5,442    6,899 
Net impairment losses recognized in earnings   -    (4,635)   (11)   -    -    (4,646)   - 
Net gain (loss) on sale of securities   388    25    (79)   1    (7)   335    144 
Net FDIC indemnification asset amortization   (1,618)   (1,369)   (1,328)   (1,159)   (1,200)   (5,474)   (6,379)
Net gain on divestitures   619    3,065    -    -    -    3,684    - 
Other operating income   653    1,046    623    885    762    3,207    4,129 
Total noninterest income   6,238    5,895    7,030    7,903    7,483    27,066    29,530 
Noninterest expense                                   
Salaries and employee benefits   9,411    9,828    10,198    10,475    10,268    39,912    39,625 
Occupancy expense   1,158    1,249    1,359    1,531    1,413    5,297    5,817 
Furniture and equipment expense   1,070    1,066    1,109    1,096    1,345    4,341    5,199 
Amortization of intangibles   265    316    277    278    281    1,136    1,118 
FDIC premiums and assessments   274    363    372    374    332    1,383    1,513 
FHLB debt prepayment fees   -    -    -    -    -    -    1,702 
Merger, acquisition, and divestiture expense   55    226    410    39    -    730    86 
Other operating expense   4,420    5,509    4,997    5,021    5,444    19,947    21,111 
Total noninterest expense   16,653    18,557    18,722    18,814    19,083    72,746    76,171 

 

Efficiency Ratio

 

EFFICIENCY RATIO CALCULATION (Unaudited)

 

   Three Months Ended   Year Ended 
   December 31,   September 30,   June 30,   March 31,   December 31,   December 31, 
(Amounts in thousands)  2016   2016   2016   2016   2015   2016   2015 
Noninterest expense, GAAP  $16,653   $18,557   $18,722   $18,814   $19,083   $72,746   $76,171 
Non-GAAP adjustments                                   
Merger, acquisition, and divestiture expense   (55)   (226)   (410)   (39)   -    (730)   (86)
FHLB debt prepayment fees   -    -    -    -    -    -    (1,702)
OREO expense and net loss   (184)   (278)   (247)   (711)   (475)   (1,420)   (2,438)
Goodwill impairment   -    -    -    -    -    -    - 
Other non-core items   8    (168)   (30)   (174)   (61)   (364)   (259)
Adjusted noninterest expense   16,422    17,885    18,035    17,890    18,547    70,232    71,686 
                                    
Net interest income, GAAP   20,957    21,121    21,691    21,111    21,175    84,880    84,753 
Noninterest income, GAAP   6,238    5,895    7,030    7,903    7,483    27,066    29,530 
Non-GAAP adjustments                                   
Tax equivalency adjustment   520    509    521    531    548    2,081    2,950 
Net impairment losses   -    4,635    11    -    -    4,646    - 
Net (gain) loss on sale of securities   (388)   (25)   79    (1)   7    (335)   (144)
Net gain on divestitures   (619)   (3,065)   -    -    -    (3,684)   - 
Other non-core items   (40)   (432)   (30)   (414)   (30)   (916)   (1,263)
Adjusted net interest and noninterest income   26,668    28,638    29,302    29,130    29,183    113,738    115,826 
                                    
Non-GAAP efficiency ratio(1)   61.58%   62.45%   61.55%   61.41%   63.55%   61.75%   61.89%
GAAP efficiency ratio   61.24%   68.69%   65.19%   64.84%   66.59%   64.98%   66.65%

 

 

(1)A non-GAAP financial measure computed by dividing adjusted noninterest expense by the sum of tax equivalent net interest income and adjusted noninterest income

 

  7 

 

 

Balance Sheet and Capital

 

CONDENSED CONSOLIDATED QUARTERLY BALANCE SHEETS (Unaudited)

   December 31,   September 30,   June 30,   March 31,   December 31, 
(Amounts in thousands, except per share data)  2016   2016   2016   2016   2015 
Assets                         
Total cash and cash equivalents  $76,307   $65,929   $44,301   $39,587   $51,787 
Securities available for sale   165,579    220,856    322,699    338,469    366,173 
Securities held to maturity   47,133    72,182    72,239    72,485    72,541 
Loans held for investment, net of unearned income                         
Non-covered   1,795,954    1,774,547    1,733,398    1,685,891    1,623,506 
Covered   56,994    61,837    68,585    76,538    83,035 
Less allowance for loan losses   (17,948)   (19,633)   (21,099)   (20,467)   (20,233)
Loans held for investment, net   1,835,000    1,816,751    1,780,884    1,741,962    1,686,308 
FDIC indemnification asset   12,173    14,332    16,431    18,787    20,844 
Premises and equipment, net   50,085    50,564    50,199    50,799    52,756 
Other real estate owned, non-covered   5,109    4,052    4,187    5,313    4,873 
Other real estate owned, covered   276    2,437    2,017    2,279    4,034 
Interest receivable   5,553    5,498    6,115    5,968    6,007 
Goodwill   95,779    101,776    100,486    100,486    100,486 
Other intangible assets   7,207    7,964    4,688    4,965    5,243 
Other assets   86,197    87,932    91,082    89,187    91,224 
Total assets  $2,386,398   $2,450,273   $2,495,328   $2,470,287   $2,462,276 
                          
Liabilities                         
Deposits                         
Noninterest-bearing  $427,705   $473,509   $451,003   $453,336   $451,511 
Interest-bearing   1,413,633    1,388,390    1,373,412    1,421,329    1,421,748 
Total deposits   1,841,338    1,861,899    1,824,415    1,874,665    1,873,259 
Interest, taxes, and other liabilities   27,290    26,599    25,553    24,576    26,630 
Federal funds purchased   -    -    42,000    18,000    - 
Securities sold under agreements to repurchase   98,005    118,532    113,392    134,661    138,614 
FHLB borrowings   65,000    90,000    140,000    65,000    65,000 
Other borrowings   15,708    15,707    15,756    15,756    15,756 
Total liabilities   2,047,341    2,112,737    2,161,116    2,132,658    2,119,259 
                          
Stockholders' equity                         
Common stock   21,382    21,382    21,382    21,382    21,382 
Additional paid-in capital   228,142    227,884    227,791    227,725    227,692 
Retained earnings   170,377    166,689    163,030    159,223    155,647 
Treasury stock, at cost   (78,833)   (78,789)   (74,974)   (64,968)   (56,457)
Accumulated other comprehensive (loss) income   (2,011)   370    (3,017)   (5,733)   (5,247)
Total stockholders' equity   339,057    337,536    334,212    337,629    343,017 
Total liabilities and stockholders' equity  $2,386,398   $2,450,273   $2,495,328   $2,470,287   $2,462,276 
                          
Shares outstanding at period-end   16,994,208    16,988,972    17,155,322    17,631,011    18,098,141 
Book value per common share(1)  $19.95   $19.87   $19.48   $19.15   $18.95 
Tangible book value per common share(2)   13.89    13.41    13.35    13.17    13.11 

 

 

(1)Stockholders' equity divided by as-converted common shares outstanding
(2)A non-GAAP financial measure defined as stockholders’ equity less goodwill and other intangibles, divided by as-converted common shares outstanding

 

  8 

 

 

Asset Quality

 

SELECTED CREDIT QUALITY INFORMATION (Unaudited)

 

   December 31,   September 30,   June 30,   March 31,   December 31, 
(Amounts in thousands)  2016   2016   2016   2016   2015 
Allowance for Loan Losses                         
Beginning balance  $19,633   $21,099   $20,467   $20,233   $20,127 
(Recovery of) provision for loan losses charged to operations   500    (1,154)   722    1,187    434 
(Recovery of) provision for loan losses recorded through the FDIC indemnification asset   -    -    (10)   9    - 
Charge-offs   (2,485)   (772)   (691)   (1,228)   (805)
Recoveries   300    460    611    266    477 
Net charge-offs   (2,185)   (312)   (80)   (962)   (328)
Ending balance  $17,948   $19,633   $21,099   $20,467   $20,233 
                          
Nonperforming Assets                         
Non-covered nonperforming assets                         
Nonaccrual loans  $15,854   $17,487   $16,626   $16,196   $17,847 
Accruing loans past due 90 days or more   -    62    64    243    - 
Troubled debt restructurings ("TDRs")(1)   114    115    115    158    73 
Total non-covered nonperforming loans   15,968    17,664    16,805    16,597    17,920 
OREO   5,109    4,052    4,187    5,313    4,873 
Total non-covered nonperforming assets  $21,077   $21,716   $20,992   $21,910   $22,793 
                          
Covered nonperforming assets                         
Nonaccrual loans  $608   $688   $680   $1,955   $647 
Total covered nonperforming loans   608    688    680    1,955    647 
OREO   276    2,437    2,017    2,279    4,034 
Total covered nonperforming assets  $884   $3,125   $2,697   $4,234   $4,681 
                          
Additional Information                         
Performing TDRs(2)  $12,838   $13,336   $13,562   $13,474   $13,889 
Total TDRs(3)   12,952    13,451    13,677    13,632    13,962 
                          
Non-covered ratios                         
Nonperforming loans to total loans   0.89%   1.00%   0.97%   0.98%   1.10%
Nonperforming assets to total assets   0.90%   0.91%   0.87%   0.92%   0.96%
Non-PCI allowance to nonperforming loans   112.32%   111.08%   125.48%   123.17%   112.61%
Non-PCI allowance to total loans   1.00%   1.11%   1.22%   1.21%   1.24%
Annualized net charge-offs to average loans   0.49%   0.07%   0.02%   0.23%   0.08%
                          
Total ratios                         
Nonperforming loans to total loans   0.89%   1.00%   0.97%   1.05%   1.09%
Nonperforming assets to total assets   0.92%   1.01%   0.95%   1.06%   1.12%
Allowance for loan losses to nonperforming loans   108.28%   106.98%   120.67%   110.32%   108.97%
Allowance for loan losses to total loans   0.97%   1.07%   1.17%   1.16%   1.19%
Annualized net charge-offs to average loans   0.47%   0.07%   0.02%   0.22%   0.08%

 

 

(1)Accruing TDRs restructured within the past six months or nonperforming
(2)Accruing TDRs with six months or more of satisfactory payment performance
(3)Accruing total TDRs

 

  9 

(Back To Top)